Aiden Murphy, partner with Crowe Horwath, was pleased to participate as a guest speaker at the Irish Hotel Federation’s third annual Irish Hotel Investment Conference which was held at the Clyde Court Hotel in Dublin on Monday 8 June, 2015.
This annual Investment Conference provides an important business and social platform for hotel owners, general managers, industry professionals, service providers and product suppliers. The Conference also included a Tourism Development Forum to discuss the successful return to growth and where the industry can go from here including the role of Government, Local Authorities, the Agencies, the Industry and Local Communities.
Aiden Murphy presented on Debt Stabilisation and Hotel Investment Feasibility. He discussed how the financing landscape of the hotel industry in Ireland has changed over the past number of years. The level of debt is decreasing as up to 300 hotels are sold and where the old loan is either paid off or written down and a new affordable funding package put in place. The level of debt as of 2009 in the hotel sector was in the region of €6.7bn and the sustainable target for the sector is c€3.9bn which will be attained by year end 2016.
As the market picks up and as trading figures improve there is opportunity for investment in the industry. Dublin City is performing well with strong occupancy and average rate growth in 2014 and 2015. Hotels for sale within Dublin are limited and demand is strong suggesting there is room for additional bedrooms to be developed within the city centre. However, there is limited development activity in terms of new build or extensions and Aiden Murphy is questioning what will happen if limited new supply is introduced to the City Centre? Outside of Dublin as Hotels are being put on the market, there is little doubt that purchasing is still be more feasible than building.